There has been a bit of a risk off......>

EGB SUMMARY: There has been a bit of a risk off move in global bond markets over

the past couple of hours going into the European close with 10y Bund yields

3.4bp lower on the day at 0.081% with Schatz down 0.4bp at -0.582%.

- Against this backdrop, peripheral spreads have also widened with 10y BTP

trading at exactly 2.991% at the time of writing, with the 3% level breached on

10y BTPs for the first time since Dec12 2018. Spreads are 7.4bp wider on the

day, and the spread to Bunds has now widened around 50bp since Jan30.

- Although there seems no immediate trigger for the end of week move, we have

seen a number of very poor data releases across the Eurozone this week with

German and Italian industrial production among the most notable. The European

Commission has also downgraded Italy's growth forecast (something that rarely

has any market impact but shows how sensitive the market is to bad news at the

moment). This was followed up by comments from Moscovici who cited the global

slowdown, uncertainty and trade tensions as reasons to be pessimistic.